A former Tory council has voted to end the mass outsourcing of frontline services, bringing most back in-house and ending one of the most controversial local government policies in years.
Barnet council in north London called itself the country’s first ‘easyCouncil’ in 2013 when it announced it would provide only the statutory minimum of services, outsourcing everything from disability and highways to planning and procurement through contractor Capita.
Bringing in the private sector at a cost of £500m over 10 years, councilors say, would allow them to reduce direct staff from 3,200 to just 322 and provide better public services for less money.
But the council, whose Finchley constituency was famously represented by Margaret Thatcher but which swung to Labor for the first time in May’s local elections, has now voted to end the policy.
Condemning years of outsourcing as a ‘failed experiment’ and the ‘death knell of the council’s outsourcing experiment’, Barnet council leader Barry Rawlings said: ‘This model of governance only guarantees savings if other councils get involved: Barnet it would be a showcase. Instead, the council paid £229m more for Capita’s main contract services than originally agreed.’
Barnet council leader Barry Rawlings with Keir Starmer after Labor won control of the Tory council in May 2022. Picture: Hollie Adams/Getty Images
Services had already started to bounce back under the previous Conservative administration after a series of disasters. In 2017, the council was forced to admit its finances were in such a state that the regulator fined Capita, while the poor condition of the borough’s roads became a major issue in local elections.
In 2018, a Capita employee working for Barnet was jailed for 62 counts of fraud totaling £2m after his crimes came to light – although the loss was not noticed by Capita or the council itself, but by the employee’s own bank. Capita was forced to absorb the council’s financial loss.
That same year, the council admitted it would have to cut services after revealing a £62m financial black hole: exactly the fate the outsourcing plan claimed it was protecting against.
The problems continue. Resident and blogger John Dix reviewed the invoices submitted by Capita. According to Dix, a parent calling the library to check if Harry Potter is in stock is charged by Capita at £8 per call, while senior officer training is charged at £1,200 per session.
By next year, however, most of the services outsourced by the previous Conservative administration will be brought back under direct council control. Rawlings said it would save taxpayers money and bring 370 staff back into direct employment with the council. Capita’s remaining contract will expire in 2026.
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The decision was condemned by Cllr Dan Thomas, leader of the local Conservative group. “Barnet Labor have made an ideological decision to bring back domestic services currently run by Capita, despite the fact that this decision will hit the bank accounts of Barnet taxpayers,” he said. “It is clear that this decision is just politics.
Rawlings disputed this, pointing to a report by Barnet Council’s policy and resources committee which found little difference – and a potential benefit of £204,000 a year – financially between extending the contract for these services and bringing them back in-house.
A Capita spokesman said: “We will deliver extra value for money for local taxpayers as we work with the council to continue to deliver the highest quality services that make the area a better place to live, work and study for everyone.”
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